Confidence in Ghana’s banking sector was hard hit by the banking sector reforms implemented by the Bank of Ghana some two years ago. The reforms saw the collapse and merger of some local banks, while some depositors who had their funds locked up are yet to access their cash.
Latest data from the Bank of Ghana however shows that customer confidence in the sector is steadily returning with an increase in deposits and total assets.
According to the data banks have recorded a 23.8% increase in total assets between January and August this year compared to the same period last year. The increase comes despite the effects of the COVID 19 pandemic.
In terms of deposits banks have also recorded an annual growth of 20.5% from January to August compared to the same period last year.
The banking industry ended 2019 with growing optimism after a period of clean up and recapitalization. The reformation of the sector paved the way for directives from the regulator aimed at maintaining public trust and confidence.
It was revealed in the 2019 3rd Quarter Monetary Policy Committee report of the Bank of Ghana, that the banking sector had become well-capitalized with 23 universal banks which were solvent, liquid, efficient and profitable. Prior to this, the industry was faced with countless panic withdrawals amidst the cleanup which left people uncertain about the safety of their deposits.
Once again, the sector has had to react to dramatic changes and uncertainties created by the COVID-19 pandemic as sectors that banks typically lend to including trade and commerce, hospitality, construction, oil and gas and education have all been severely impacted. Banks have therefore had to re-strategize and re-prioritize projects.
Interestingly though information from a 2020 PWC report on the banking industry shows that, prior to COVID-19, the banks had begun aggressively driving the digital agenda and encouraging customers to join the digital train. The foresight of the banks as well as the implementation of the use of various digital channels have greatly helped to support businesses during these times of COVID-19, as customers had already built confidence in the use of these channels.
The latest summary of Macroeconomic and Financial Data shows that confidence in the banking sector is growing as highlighted by growth in deposits and total assets of banks among others.
Some bank clients and others spoke to Citi Business News about their confidence or otherwise in the banking sector.
Ivy Mensah, a trader at Mallam Atta Market said” I used to save with two financial institutions, but I lost my money during the clean up. I used to follow up on it but not anymore. I do not save with any financial institution at the moment; but if I decide to in future it will be with Ghana Commercial Bank.”
Another trader also at the Mallam Atta Market, who gave her name as Lebene, said “As for me, I will never save with any bank in this country. I will rather save with a susu collector because I can easily access my funds whenever I need them”.
Joseph Animm, who also spoke to Citi Business News said he has lost all confidence in the sector.
“I wont open a bank account; apart from the process being too long, I do not trust any of the banks so I will keep all my money safe in my mobile money account”.
Others however of different views.
Ama told Citi Business News that she has full confidence in the sector after the clean up
“I trust everything that the Bank of Ghana has done and I feel confident saving in any of the banks that are left in the country”.
Kwesi also said” Ghana’s banking sector is now the strongest and best in the world after the clean up that took place”.
